Japan's second-largest bank, Sumitomo Mitsui Financial Group (SMFG), has announced plans to develop a stablecoin in collaboration with U.S.-based blockchain firms Ava Labs and Fireblocks, as well as TIS Inc. The stablecoin will utilize Avalanche's blockchain infrastructure, while Fireblocks will create the token management system. The project, backed by SMBC's $1.7 trillion in assets, aims to enhance cross-border payment efficiency, with a focus on wholesale payments. It will also explore use cases such as tokenized real-world assets, including bonds and real estate. Testing is set to begin in late 2025, with a full launch expected by fiscal 2026. This initiative aligns with Japan's regulatory framework for stablecoins, which was updated in 2023 to allow issuance and circulation of fiat-backed stablecoins under strict management. The partnership was reported by Nikkei.